U.S. grains: China tensions cap soybeans’ gains

Corn prices up slightly on trade optimism; wheat falls back slightly

CBOT November 2020 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures climbed on Thursday, boosted by demand from China, although escalating tensions between Beijing and Washington capped gains.

Corn edged higher as optimism over possible continued buying from China offset strong crop conditions. Wheat scaled back on technical selling.

The most-active soybean contract on the Chicago Board Of Trade (CBOT) rose 4-1/2 cents to $9 a bushel (all figures US$).

CBOT corn futures added 3/4 cent to $3.35-1/2 a bushel, while CBOT wheat was down five cents at $5.29-1/2 a bushel.

Soybeans gained on new export sales to China, while traders eye crop conditions moving into August, when weather conditions are critical for soybeans development across the U.S. Midwest.

“I think we’re putting a little bit of a premium in here, due to the export demand and the unknown around crop development,” said Tom Fritz, commodity broker at EFG Group.

Private exporters reported the sale of 132,000 tonnes of soybeans to China the U.S. Department of Agriculture (USDA) said on Thursday.

Escalating tensions between the two countries muted gains after Washington ordered Beijing to close its consulate in Houston amid accusations of spying.

Corn’s end slightly to the upside came as strong crop conditions weighed on the market. But optimism about China’s appetite for the grain offered hope of continued export sales.

“The market yesterday was responding to Chinese inquiries,” said Arlan Suderman, chief commodities economist at StoneX. “Today the focus is more on the crop.”

Wheat pulled back from recent gains, but continued to trade near three-month highs.

News that Brazil purchased two cargoes of Russian wheat this month also weighed on the market, Suderman said.

“That suggested maybe wheat was getting a bit overpriced,” said Suderman. “Wheat has to compete on the world market.”

Reporting for Reuters by Christopher Walljasper; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.

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